For the first time, money for Memphis schools will be based on student needs. Here’s how it works.

The children at Kingsbury Elementary School thought it was funny to have a teacher sitting at a tiny desk, working side-by-side with them.

But Dawn Grayson shadowed several students to help her understand how a new way of allocating money could change the way her Memphis school operates.

Grayson has been part of a team at Kingsbury preparing to switch to a school finance model known as student-based budgeting. It’s a key component of Shelby County Schools’ efforts to ensure state and local money is distributed based on student need.

She was looking at how English language learners, students from low-income families, and students with disabilities, spent their day to help her determine the school’s most urgent needs.

“It’s important that we do step back and say, how do we make this more student-centered?” said Grayson, who has taught English learners there for six years. “We can’t figure out their needs unless we walk their walk.”

But whether or not student-based budgeting will actually help solve school inequities remains to be seen.

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Kingsbury Elementary School teachers and staff, including two new teacher assistants hired under new funds from student-based budgeting in Shelby County Schools, receive training.

Currently, every school receives money based on student enrollment and the number of teachers it takes to teach those students. The final amount given to a school is primarily based on the teachers’ salaries, and the supplies and resources the school needs. The traditional model usually allocates less money to schools with high-needs students because they generally employ less-experienced, lower-paid teachers.

Under the new method that goes into effect for the 2018-19 school year, every school will receive $3,400 per student. Additional money will then be allocated depending on four factors recently determined by Shelby County Schools: first-time readers, students with disabilities, students who score exceptionally high or low on state tests, and students who often move from one home to another.

Altogether, about $377 million, or a little more than a one-third, of the district’s proposed $1.05 billion budget is dedicated to student-based budgeting. How the rest of the money is spent will still be decided by the district’s central office. Charter schools authorized by the district are excluded from the new formula and will still receive money based on student enrollment.

Read more about student-based budgeting and how other districts, such as Nashville, have transitioned to this model.

At the heart of the funding model is allowing principals to make their own decisions about what kinds of jobs are needed and what materials their schools need. The district’s national consultant, Education Resource Strategies, has trained teams at six Memphis schools for the past two years: Brownsville Road Elementary, Craigmont Middle, Craigmont High, Kingsbury Elementary, Kingsbury Middle, and Kingsbury High.

PHOTO: Caroline Bauman

Lin Johnson, chief of finance

“We see this as empowering principals to make the changes that they think they need to make to promote bottom-up innovation,” said Lin Johnson, who has been the district’s chief finance officer since 2015.

During his three years as principal of Kingsbury Elementary, Wynn Earle didn’t talk much about budgeting because it was never in his control.

“I could want all these positions but I would not have the financial resources to acquire those people,” he said.

With an infusion of about $164,000 under the new model, Earle hired two education assistants and another full-time physical education teacher so that other teachers could have 40 more minutes of planning time every day. Some of the money will also go toward substitutes so that teachers can have more time for training during the school day.

He has hired another bilingual mentor to lead monthly parent meetings with Hispanic families, who make up two-thirds of the student population. Thanks to the new dollars, those meetings will have dinner, and kits to teach parents how to read to their children.

Planning how to spend the money, he said, gave him the opportunity to work more closely with teachers, parents, and even other schools his students will attend, to identify the school’s most urgent needs.

“It made us evaluate ourselves from the inside out,” he said.

Johnson said the public will be able to see how much each school will get before the new fiscal year starts July 1, but as of early August, the district hadn’t released individual school budgets yet. Some schools may see a dip in funding because of the formula or because of an anticipated drop in enrollment. In the first year, a school won’t get more than a 6 percent boost or a 2.5 percent cut, Johnson said, so there won’t be drastic changes in the beginning.

The district will start with principals who have been at their schools at least two years, have a high score on their annual performance evaluation, and whose schools rank three or higher on the district’s five-point report card. Principals will submit applications with a plan on how they will use the money. And over time, the district hopes up to half the budget will be distributed this way. Leaders want to see this year’s results before deciding when to transition every school.

PHOTO: Caroline Bauman/Chalkbeat

Chris Caldwell

Chris Caldwell, who chairs the school board’s budget committee, said student-based budgeting needs to be assessed regularly to make sure it’s producing its intended purpose: equity in funding.

Student-based budgeting “can be helpful to identify inequities, but it doesn’t guarantee responses that will eliminate” them, he said, adding the state’s “outdated and inadequate” school staffing formula already puts Tennessee’s largest district at a disadvantage.

Here’s a breakdown of how much money follows students based on the four characteristics prioritized by Shelby County Schools:

Grade level. This is the most common characteristic cited by districts across the nation who use this model. Shelby County Schools will add $1,020 for each student in kindergarten through second grade, and $680 for third- through fifth-graders. That’s a high weight compared to other districts, said Marguerite Roza, a Georgetown University professor who studies school finance.

Johnson said the district put a high weight on younger students because the district is struggling to boost its reading levels. During the 2016-17 school year, just 21 percent of students in third grade were considered by the state to be reading on grade level. That’s far below the district’s goal of 90 percent by 2025.

Students with disabilities. Some costs for students who are disabled won’t be factored into the base amount allotted per student because the district wants to control how federal money and other grants for those students are spent. But the district plans to add $825 for each student with disabilities to contribute more to a school’s administrative and service costs.

Mobility. Instead of using a school’s poverty rate to determine higher need, district leaders want to measure how often students move from school to school, which they say is closely connected to poverty. Each student would garner $340 more for the school. A school’s mobility rate is the number of students who transfer there after the 20th day of school divided by the number of students who attend that year.

Student performance. Achievement on state tests is “one of the most important indicators of student need at a school” according to the district’s proposed budget. Shelby County Schools is hoping to target students transitioning to middle and high school by looking at state test score data for rising sixth- and ninth-graders. Schools will receive $340 for each student who scored below grade level and for each student who scored higher than their grade level on 2016-17 state tests. For elementary schools, that calculation will be based on fourth-graders.

Typically, low-performing students are considered to have the most need in student-based budgeting models that prioritize test scores. But Johnson said the district’s highest achievers also need more supports, such as more advanced courses and ACT preparation, to keep them engaged.

“It’s not just focusing on struggling students,” he said. “There are high-achievers who need to pushed.”

Roza, the Georgetown professor who specializes in this model, said her team does not recommend giving a school more money for students who already are ahead.

“We worry about that because of its equity implications,” she said. “Schools with high performers means that there’s fewer dollars for middle performing schools.”

Grayson, the Kingsbury Elementary teacher, interviewed many of the students she shadowed. She found that students – as well as herself – had little understanding of how money was allocated or spent. She said the new budgeting method gives everyone more opportunity to understand what goes on behind the scenes.

“We hope that it’s a step in the right direction to help students who need it most,” she said.

KIPP Memphis gets $40,000 to start fund that helps college students pay for unexpected costs

A charter school network in Memphis is getting into the college scholarship game with the help of a national grant.

KIPP Memphis Collegiate Schools was one of four charter networks nationwide selected for a $40,000 grant to launch a “college persistence fund,” which will provide small, emergency grants to help KIPP Memphis graduates pay for college.

“Sometimes, an increase in room and board or an unexpected lab fee may leave a college student unable to pay their tuition bills, and possibly lead to them dropping out,” a KIPP spokeswoman said in a statement.

The Memphis network runs seven schools, one of which is a high school. KIPP Memphis Collegiate High School saw 80 percent of its graduates last year go on to a post-secondary institution. That’s 20 percentage points higher than the district average.

KIPP Bay Area Public Schools, KIPP NYC Public Schools, and KIPP Philadelphia Public Schools were also selected by the Ludwig Family Foundation to receive grants. The DC-based foundation launched a similar college fund with KIPP DC in 2014.

The DC KIPP chapter has seen success with the small grants, the KIPP Foundation’s leader, Richard Barth, wrote on Monday in a column for Forbes. Over the last four years, KIPP DC has offered 39 persistence grants to alumni in college, and 95 percent of those grant recipients are still in college or have graduated.

“These awards, which average around $3,200, provide critical support, like helping KIPP alumni take summer courses to fill credits and accelerate towards graduation or covering living expenses that can derail a college degree,” Barth wrote.

The lawmakers point to statistics from the Office of Management and Budget showing that 57 percent of the $11.9 billion state dollars schools spent in 2016 were used in the classroom. And a report using data from the National Center for Education Statistics shows personnel hiring across the country has dramatically outpaced enrollment, with non-teacher hiring dwarfing that of full-time teachers.

“While the number of teachers and students in our public schools have essentially flatlined, administration and non-teaching staff have ballooned,” House Speaker Brian Bosma, a Republican from Indianapolis, told fellow lawmakers in November.

But school districts — eager to receive more money for teacher pay increases that will make them competitive with neighboring states — are pushing back on the characterization that they aren’t using funding as efficiently or responsibly as possible. Trimming administrative payroll alone won’t be enough to raise money for higher teacher salaries.

“When people make broad brush stroke comments about funding, it’s easy to take a shot at administrators,” said Flora Reichanadter, superintendent of Pike Township schools. “There’s this misconception … that (districts) just kind of squandered their money, which is an absolutely inaccurate statement.”

But just figuring out how much of what Indiana spends on schools directly affects students is a complicated endeavor — and figuring out what share goes solely to teachers is even harder. We know that in 2015, the most recent year available, 38 percent of Indiana’s K-12 staff members were full-time teachers. But Rep. Bob Behning, chairman of the House Education Committee, said Indiana can’t isolate teacher salaries and benefits from those of other licensed educators in order to see how much schools and districts spend on them alone.

“Part of our discussion has been trying to isolate those numbers and trying to figure out exactly what that is,” Behning said. “We’ve had difficulty getting data … The fact that teacher by definition is not just a classroom instructor, but could be a librarian or any number of things.”

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But numerous interests are fighting for limited state budget dollars this year, so lawmakers are scrutinizing how existing state funds are being spent by school districts.

“I think we need to have an open discussion about how do we have efficiencies and drive dollars to the classroom,” Behning said. “There’s no question there are things we can do … how do we do more to streamline the operations of the system?”

As an example of cost savings, Behning said that many districts, some of them small and rural, have their own bus depots and maintenance teams — services that could be combined with other districts or cities and towns to reduce spending.

A 2017 report from EdChoice, a national pro-school choice organization based in Indianapolis, criticized school districts for increasing spending on non-teaching staff instead of using the dollars on teacher salaries. Marty Lueken, director of fiscal policy and analysis for EdChoice, questions whether that has helped students.

“Whenever I hear someone say that schools are struggling with large classes, or need more resources for schools or classrooms, or teachers should be paid more, I think about these hiring practices,” he added. “We could have had those other things, like smaller classes or higher take-home pay for teachers, if district leaders made different personnel decisions.”

But only looking at staffing and comparing spending on full-time teachers and to spending on non-teacher leaves a lot out of the picture, said Dennis Costerison, executive director for the Indiana Association of School Business Officials. On its face, that comparison underestimates what schools spend on other adults, such as counselors and principals, who work directly with students, and part-time instructors, who are often cheaper and easier to hire than full-time educators.

“Administrator,” too, is a finicky term, Costerison said. Sometimes, the term includes department heads, who might also be full-time teachers.

Money not spent on teacher salaries also funds resources necessary to ensuring clean and safe schools, such as custodians, accountants, human resources staff, and school safety officers.

Reichanadter, who previously led Franklin Township schools, said school funding has not kept pace with the cost of living, and even if it had, cutting administrative positions isn’t enough to add up to teacher raises.

“There’s only so much you can cut,” she said. “There’s only one of me. There’s 500 teachers. Divide my salary up between 500 teachers and we’re talking about maybe a cup of coffee.”

Administrators, she cautions, also do work that otherwise would fall to principals or teachers, who should be spending their time in the classroom or guiding instructions, she said, not doing payroll or buying supplies. And while some administrative work seems far removed from student learning, the tasks add up to an environment and a system where learning can be the priority, she said. Plus, she added, some non-teaching roles have naturally increased as schools have added services for vulnerable students, such as nurses, occupational therapists, and interpreters.

“It’s ludicrous for some of the legislators to conclude that we didn’t pay attention to this,” Reichanadter said. “I have to be a really good steward of my resources because if I don’t and I don’t compete with my local area, then I’m going to lose teachers and have a lot of turnaround … and that affects learning.”

Costerison added that a portion of a district’s non-teaching costs are the result of mandates made by the very legislature that is critiquing school spending, such as requirements around school safety, testing, and teacher training.

“Whenever bills are passed and laws are enacted, some of them do have repercussions from the standpoint of additional staffing and additional responsibilities for administrators and teachers,” Costerison said.

The state’s most recent 2016 report on classroom spending from the Office of Management and Budget estimates about 57 percent of state dollars go to the classroom — a figure that includes teacher and principal salaries, dollars spent on materials and textbooks, and pay for counselors and similar staff. But that percentage not spent on classrooms includes funding that state law currently says can’t be spent on instruction, Costerison said.

Lawmakers will have a tough time come January deciding which funding asks to prioritize in the face of shrinking state revenue and several urgent competing issues, including the need to better fund the Department of Child Services.

“When you look at the revenue that exists, the funding, quite frankly, isn’t there at the moment,” said Sen. Jeff Raatz, the new chairman of the Senate Education Committee. “The reality is that we have some significant hurdles we have to overcome to get where we need to go.”